Obama Budget Chief: Cutting Spending Doesn’t Equal Cutting Deficit

White House budget director Jacob Lew trotted out a mantra of sorts Wednesday: “There is an agreement that we should be reducing spending. There also needs to be an agreement that we need to reduce deficits… because one can reduce spending and do nothing about the deficit. I think that we have to do both.”

Bloomberg News

OMB Director Jacob Lew

Which is another way of saying: The president wants to be sure tax revenues are on the table before he starts bargaining about restraining spending on popular retirement and health benefit programs. But Lew, meeting Wednesday with reporters at a breakfast hosted by Bloomberg News, was reluctant to put it so bluntly

A few Senate Republicans — including Mike Crapo of Idaho and Tom Coburn of Oklahoma — agree with that.

But House Republicans, so far, are resisting any talk of raising revenues, even if it’s accomplished by eliminating deductions, credits and loopholes rather than raising tax rates, as the Simpson-Bowles fiscal commission recommended. Although Congress — and the administration — is preoccupied by continuing controversy over spending bills for the current fiscal year, which ends Sept. 30, House Budget Committee Chairman Paul Ryan (R, Wisc.) is fashioning a budget resolution for next year, fiscal 2012, that he and House Speaker John Boehner say will show how they would reduce the deficit over the next several years.

“I don’t know how they are going to put together a budget,” Lew said. “I look forward to seeing their budget. I know that if you look at the things that I have seen publicly it doesn’t add up to a lot of deficit reduction.”

To reduce the deficit by a larger amount and more rapidly than the Obama budget without raising taxes, arithmetic forces House Republicans to outline deeper spending cuts than the president did.

The evolving White House strategy — to make sure revenue increases are part of negotiations before get going — recalls maneuvering between congressional Democrats and the George H. W. Bush White House. Serious deficit-reduction talks began only after President Bush issued a statement in June 1990, the wording of which was negotiated with Democrats. In it, he broke his “read my lips: no news taxes” pledged and said: “It is clear to me that both the size of the deficit problem and the need for a package that can be enacted require all of the following: entitlement and mandatory program reform; tax revenue increases; growth incentives; discretionary spending reductions; orderly reductions in defense expenditures; and budget process reform.”

Update: Sen. Coburn’s spokesman emails to say that — while the senator has agreed that everything, including revenues should be on the table — he doesn’t see the world as Jack Lew does.

“He strongly disagrees with Lew’s comment that cutting spending does not reduce the deficit,” Coburn communications director John Hart wrote. “ That’s nonsensical on its face. If we cut spending by a trillion dollars we would reduce the deficit by a trillion dollars (all other things being equal).That said, he does believe everything should be on the table.”

“Dr. Coburn does not believe the president needs to wait for Republicans to put revenue on the table…The president should lead now,” he added. “Dr. Coburn is…not looking to 1990 as model for negotiations,” he continued. “ He believes Congress should verify, verify then trust on spending cuts.”

Coburn has urged the president to put entitlements on the table, and said so in a letter cosigned by 22 Senators and in an op-ed.

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